Question 1

How do you read a price forecast?

Accepted Answer

The forecast pages show a base target and a range around it. The range is the useful part. The single number is not a prediction of what will happen.

Question 2

What do the forecast confidence bands mean?

Accepted Answer

A statistical forecast produces a distribution, not a point. The 68% band is the range the model puts roughly two-thirds of the probability into; the base target is just its centre. A 68% band means the model expects price to land outside that range about one time in three — which is often, not rarely. Wider bands mean the model is less certain, usually because the asset is more volatile or has less history. A very wide band is the model telling you it does not know.

Question 3

How should you use a price forecast?

Accepted Answer

Compare the bands to your own assumptions rather than reading the base target as a target. If the bear edge of the range is a price you could not tolerate holding through, that is the actionable information on the page — not the headline number.

Question 4

What does the price forecast not model?

Accepted Answer

These are time-series models fitted to past price. They do not know about regulation, an exchange failure, a protocol change, or anything else that has not already shown up in the price history. Every genuine shock is, by definition, outside the band. Forecast horizons here are measured in weeks. The further out, the wider the range, and the less the centre line means.

How do you read a price forecast?

What do the forecast confidence bands mean?

How should you use a price forecast?

What does the price forecast not model?

Other models explained